From styling and marketing to bank and conveyancer fees, these are the costs you can expect when selling your home.
When selling your home, there are a few different costs involved. Knowing what expenses to expect will allow you to set a suitable budget to avoid any nasty surprises later on. According to Canstar, there are seven key costs (some optional) that you need to budget for; repairs and renovations, styling and staging, marketing, agent fees, conveyancing fees, lender fees, and taxes.
There is no one set fee for all these expenses as it depends on your property, its location, your real estate agent, the marketing campaign you choose, and your lender. So, before you sign an agent contract or lock in a conveyancer, understand what their fees, commission and costs are so that you can factor in all of these expenses from the get-go, allowing you to make a more informed decision about what is best for your budget and personal situation.
Repairs and Renovations
Before putting your home on the market, talk to your real estate agent about what repairs and renovations you should do around the house that will reap the most return. CEO of Belle Property, Hanscomb, explains that you don't want to be making any changes to your home if it's not going to increase your selling price.
"Your real estate agent knows the local market and what buyers are looking for, so they are a great source of information, and sellers should tap into this before making any changes to their house," says Peter. "Your sales agent has the potential to save you thousands by advising you on where you should spend and where you should save."
Styling and Staging
Professional styling gives the home a broader appeal. Stylists know how to present rooms and utilise space to show the home's fullest potential, ultimately driving the sale price up.
The cost of property styling and staging varies widely and is entirely optional. Depending on the size of your property, whether the property is empty or existing furniture is used, Canstar says the cost can range between $2,500 to $20,000 plus.
When selling your property, a comprehensive marketing campaign will put your home in front of active and passive buyers, with the idea that the more interest you generate, the more people that will bid, resulting in a higher sale price. According to realestate.com.au, the average marketing campaign in Melbourne cost $6,500 to $8,000. In Sydney, the marketing costs can range between $4,500 to $10,000
As the seller, you cover the cost of marketing your property. Your sales agent will recommend a campaign that will include photography, copywriting, advertising, letterbox drops, online property listings, signboards and social media.
"Each property listing is different, and the marketing campaign needs to reflect that. Depending on your budget, campaigns can be adjusted, so work with your sales agent to find the best marketing package to suit your property and budget," says Peter.
There are two types of agent fees, a flat fee and commission, with some sales agents only working on commission. Either way, the agent fee needs to be agreed on before signing a contract with your sales agent.
A flat fee is where you and the agent agree on a fixed fee, no matter the final sale price. A commission is where the sales agent gets a percentage of the final sale price. The commission percentage can range from 1 per cent to 3 per cent, depending on property value and how many agents are vying for your business.
Realestate.com.au mentions that bonuses on top of a sales agent’s commission are becoming increasingly popular. This is when your agent achieves a sales price above the agreed reserve. Whether the agent receives a bonus, and what that amount is, is negotiable.
If you choose to sell your property by auction, you will need to pay an auctioneer fee. The cost can vary depending on your property, location, and the auctioneer's experience, but typically, you can expect to pay $500.
Just like when you're buying a home, you will need to engage the services of a conveyancer. They deal with the process of transferring legal ownership of the property. Depending on the property, the circumstances and the complexities surrounding the sale, the conveyancing cost can vary between $500 to $3000.
"When selling your property, you should use a local conveyancer as they have a greater understanding of the local market," advises Peter. "Speak to the conveyancer about their costs as their services can include everything from sourcing titles of the property to chasing outstanding rates and utilities."
You will encounter bank fees and charges if you're ending your contract with your home loan lender. Each lender is different, so you will need to speak with them about whether you will need to pay early exit fees (if you purchased your home pre-2011) and other administration, discharge, or settlement fees.
According to the Australian Taxation Office (ATO), when you sell certain types of property, you could potentially be paying Capital Gains Tax (CGT), which is the difference between how much you paid for it and how much you sold it for. This can have implications for you, especially if you have investment properties, so speak with the ATO and your accountant when selling your house about your tax obligations.
To learn more about the costs involved in selling your property, speak to your local Belle Property real estate agent.